Santa Maria, Calif., Settles $30 Million COP Audit With IRS

McConnell, Alison L.
March 2006
Bond Buyer;3/31/2006, Vol. 355 Issue 32351, p5
Trade Publication
The article reports on the auditing on its 30 million dollars waste and wastewater certificates of participation (COP). It was determined by the Internal Revenue Service (IRS) that the COPs were arbitrage bonds and should be declared taxable. The IRS in 2005 has started auditing the so-called yield-burning deals in which the issuer counts the cost of a put option as an investment cost. To close the agreement, Santa Maria was required to pay the IRS to settle the investigation.


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